The Korea Fair Trade Commission (the “KFTC”) conducted an investigation on Hyundai Construction Equipment (“Hyundai”) upon receipt of allegations made by one of Hyundai’s subcontractors. The allegations reviewed by the KFTC were whether Hyundai (i) unfairly set the subcontracting price and (ii) failed to make payment. Allegations were also made by a secondary vendor which did not receive payment from the subcontractor Hyundai had selected as the winning bidder in the initial tender. The secondary vendor argued that Hyundai’s unit price in the supply agreement was unreasonably low to aggravate the business operations of the subcontractor and that Hyundai failed to make two-months’ payment to the subcontractor to result in damage to the secondary vendors.
Lee & Ko represented Hyundai in this matter and conclusively demonstrated that Hyundai selected the subcontractor in the initial tender based on a reasonable and fair standard and has never unreasonably lowered the unit price. Lee & Ko was especially effective in arguing that the secondary vendors did not receive payment due to the subcontractor’s own failing business as evidenced by the rehabilitation process pursued by the subcontractor, and that Hyundai in fact provided significant assistance to the subcontractor. Lee & Ko further argued that payment was not made to the subcontractor due to Hyundai’s right to offset the account for a small portion of the receivables.
Based on the effective and persuasive arguments of Lee & Ko, the KFTC found no liability against Hyundai and closed the investigation in just three months’ time, which is an exceptionally short investigation period.